1 / 13

TERMS OF SALE

MANAJEMEN KEUANGAN - Kuliah V 04.05.2009 CREDIT MANAGEMENT RWJJ CH. 28 FEUI Program Studi Maksi – PPAK Sugeng Purwanto Ph.D , FRM Tugas : Pelajari Exercises Ch. 28. TERMS OF SALE

alaric
Télécharger la présentation

TERMS OF SALE

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. MANAJEMEN KEUANGAN - Kuliah V 04.05.2009CREDIT MANAGEMENT RWJJ CH. 28 FEUI Program StudiMaksi – PPAKSugeng Purwanto Ph.D, FRMTugas: Pelajari Exercises Ch. 28

  2. TERMS OF SALE The terms of sale refer to the period for which credit is granted, the cash discount , and the type of credit instrument. Example: 2/10, net 30. The customer has 30 days from the invoice date within which to pay. A cash discount 2% is to be given if payment is made in 10 days. Net 60. The customer has 60 days from the invoice date to pay and no discount is offered for early payment.

  3. THE CASH FLOWs OF GRANTING CREDIT Firm Deposits Check In bank Bank Credit Firm’s account Credit sale Is made Customer Mails check Cash collection Account receivable

  4. FACTORS IN SETTING CREDIT PERIOD • The probability that the customer will not pay • The size of the account • The extent to which the goods are perishable

  5. EXERCISE 28.1 EXERCISE 28.2

  6. THE DECISION TO GRANT CREDIT: RISK AND INFORMATION Locust has determined that if it offers no credit to its customers, it can sell its existing computer software for $50 per program. It estimates that the costs to produce a typical computer program are $20 per program. The alternative is to offer credit, customers of Locust will pay one period later. With some probability. Locust has determined that if it offers credit, it can charge higher prices and expect higher sales. Decide which strategy? 1). Refuse Credit ? 2). Offer Credit ?

  7. THE COSTS OF GRANTING CREDIT Cash In Dollars Total costs Optimal amount Of credit Carrying costs Opportunity costs Level of credit extended

  8. Carrying costs are the costs associated with granting credit and making an investment in receivables. Opportunity costs are the lost sales from refusing to offer credit. The costs drop as credit is granted.

  9. Trade credit is more likely to be granted if • The selling firm has a cost advantage over other lenders • The selling firm can engage in price discrimination • The selling firm can obtain favorable tax treatment • The selling firm has no established reputation for quality products or services • The selling firm perceives a long-term strategic relationship THE DECISION TO GRANT CREDIT

  10. CREDIT INFORMATION • 1. Financial statement • 2. Credit reports on customer’s payment history with other firms • 3. Banks • 4. The customer’s payment history with the firm • CREDIT SCORING • Character • Capacity • Capital • Collateral • Conditions CREDIT ANALYSIS

  11. Average collection period • Aging schedule • Collection efforts • Factoring COLLECTION POLICY

  12. Use of secured debt • Use captive finance company • Securitization. • Selling A/R to a financial institution HOW TO FINANCE TRADE CREDIT

  13. END

More Related